Gold, silver, pgms, mining and geopolitical comment and news

SPDR Gold

Gold Today –Gold closed in New York at $1,353.30 on Monday after Friday’s close at $1,353.30.

The $: € was down at $1.1197from $1.1175.

The dollar index fell to 95.42 from 95.64 Monday.

The Yen was stronger at 101.69 from Monday’s 102.20 against the dollar.

The Yuan was stronger at 6.6358 from 6.6415 Monday.

The Pound Sterling was stronger at $1.3231up from Monday’s$1.3179.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 08 2

2016 08 1

SHAU

SHAU

288.69

288.65

289.32

287.95

Dollar equivalent @ $1: 6.6358

$1: 6.6415

$1,353.15

$1,351.84

$1,356.11

$1,348.53

Shanghai prices took New York’s close higher still and London even higher.

We are seeing the Yuan strengthen against the U.S. dollar but staying in line with other currencies. The People’s Bank of China is not focused on the dollar but on the broad basket of currencies of its trading partners. The PBoC wants a stable to weakening Yuan and that despite what level the dollar will reach at some point this year.

We previously mentioned that the Yuan would weaken against the dollar to bring it into line with other global currencies against which the dollar had risen. But now that the dollar itself is weakening we are lowering our sights on where the Yuan will be by year’s end. We see it stronger than 7.00 to the dollar [weaker means more Yuan to the dollar] by year’s end.

LBMA price setting: $1,358.15 after Monday 1st August’s $1,348.85.

The gold price in the euro was set at €1,212.63 up €4.42 from Monday’s €1,208.21.

Ahead of the opening in New Yorkthe gold price stood at $1,357.50 and in the euro at €1,212.81.

Silver Today –The silver price closed in New York at $20.43 on Monday up from $20.34 on Friday.Ahead of New York’s opening the price was trading at $20.68.

Price Drivers

Ahead of Thursday’s expected rate cut in the U.K. [and likely more QE] we have the announcement from the Japanese government we expected to come and mentioned yesterday. $273 Billion worth of stimuli! The details will follow. And yet we are seeing the Yen continuing to strengthen towards 100 and possibly lower in the days ahead.

It is clear that the Bank of Japan has come to the end of its road and that the government must step up to the plate now. Its demographics are against it as is the age of its population. Disinclined to spend and focussed on less spending, not more, as it ages, the population will not run out to support growth. The Abe government seems to be facing an intractable situation, worse than, but similar to, many other countries in the developed world.

After years of efforts to combat deflation, many now believe that the current round of stimuli will not change the picture of the deflating Japanese economy.

Gold ETFs – In New York on Monday there were purchases of 5.937 tonnes bought into the SPDR gold ETF (GLD) and a purchase of 0.51 of a tonne into the Gold Trust (IAU) leaving their holdings at 964.032 tonnes and 219.70 tonnes, respectively.

The U.S. buying of physical gold via the U.S. based gold ETFs has begun again in earnest. If it continues at this rate gold and silver prices will move through overhead resistance!

Since January 4th this year, the holdings of these two gold ETFs have risen by 386.117 tonnes.

Silver –Silver prices are consolidating alongside gold and at the same pace today. Tomorrow may see it resume its characteristic vigor. The market has a positive tone.

Gold Today –Gold closed in New York at $1,341.40 on Wednesday after Tuesday’s close at $1,319.80.

The $: € was down at $1.1084from $1.0991.

The dollar index fell to 96.54 from 97.29 Wednesday.

The Yen was stronger at 104.68 from Wednesday’s 105.64 against the dollar.

The Yuan was stronger at 6.6610 from 6.6709 Wednesday.

The Pound Sterling was stronger at $1.3178up from Wednesday’s$1.3120.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 28

2016 07 27

SHAU

SHAU

286.93

283.34

287.55

283.17

Dollar equivalent @ $1: 6.6610

$1: 6.6709

$1,339.82

$1,321.09

$1,342.71

$1,320.30

Shanghai prices were on the same momentum track as New York, rising after the Fed statement. We expect the Bank of Japan to issue a statement ahead of New York’s Friday opening which could well have the same impact as the Fed’s statement on gold & silver prices.

We have watched and listened to the media’s fascination with Fed statements over the last few years and seen how the markets have been led by it. But with hindsight it is clear that the reality is that the Fed is following, not leading the data. When we look at that data there is little to inspire economic optimism and belief that rates are going to rise soon. The future, on the contrary, points to around a decade of very low interest rates as the global economy struggles with structural changes and a solid wave of deflation.

The desperate battle of exchange rates is dominating total returns and while emerging currencies yield good returns at the moment their exchange rates can become mercurial in a heartbeat, ensuring risk levels in the medium to long term remain heightened. We expect another episode in this story to unfold in the days not far ahead.

LBMA price setting: $1,341.30 after Wednesday 27th July’s $1,321.25.

The gold price in the euro was set at €1,218.15 up €16.55 from Wednesday’s €1,201.60.

Ahead of the opening in New Yorkthe gold price stood at $1,342.35 and in the euro at €1,210.74.

Silver Today –The silver price closed in New York at $20.38 on Wednesday up from $19.64 on Friday.Ahead of New York’s opening the price was trading at $20.37.

Price Drivers

The report from the Fed was positive on the U.S. economy but not so positive as to indicate September could see a rate hike. Why not? Most U.S. observers are riveted on the U.S. economy in isolation from the rest of the world. But that is myopic. The Fed has made it clear that the global economy does affect the U.S. economy. The dollar exchange rate does affect the U.S. economy and cannot be ignored or removed from the formula that defines when a rate hike will occur.

The monetary system is under stress reflecting deep ailments [Japan, Italy, Brexit, low growth, burgeoning debt] and the Fed is quite right to bring these into their formulae for rate hike decisions. Gold and silver prices barely reflect these ailments. Should these weaknesses burst upon the global economy [and we cannot see reasons why they shouldn’t] , we will not only see very different global financial markets but a structurally different approach to precious metals.

The Fed’s announcement produced the reaction we expected and tomorrow’s Bank of Japan will likely extend this reaction.

Gold ETFs – In New York on Thursday there were no sales or purchases into or out of the SPDR gold ETF (GLD) or the Gold Trust (IAU) leaving their holdings at 954.235 tonnes and 217.99 tonnes, respectively.

We are starting to hear well-respected investment advisors recommending increasing the percentage of gold held in portfolios from 10% to 25%. To us this signifies recognition of the depth of global financial market changes that lie ahead of the world.

Silver –Silver prices showed the potential for running ahead of gold as they jumped 4% yesterday against gold’s 1.5%. But all silver price movements rely on gold leading the way, both up and down. Such price movements do not reflect the fundamentals of the silver market, only the relationship to gold prices.

Gold Today –Gold closed in New York at $1,319.80 on Tuesday after Monday’s close at $1,314.10.

The $: € was down at $1.0991up from $1.007.

The dollar index rose to 97.29 from 97.03 Tuesday.

The Yen was weaker at 105.64 from Tuesday’s 104.13 against the dollar.

The Yuan was stronger at 6.6709 from 6.6754 Tuesday.

The Pound Sterling was weaker at $1.3120down from Tuesday’s$1.3081.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 27

2016 07 26

SHAU

SHAU

283.34

283.84

283.17

283.71

Dollar equivalent @ $1: 6.6709

$1: 6.6786

$1,321.09

$1,322.53

$1,320.30

$1,321.92

Shanghai prices were in line with New York’s close and London held it at the same level adjusting for a slight exchange rate change.

With China the world’s largest gold producer [450 tonnes] and the Shanghai Gold Exchange the largest global gold market, we expect to see its influence over the gold price rise substantially, unless it is in the interests of the P.B. of C. to hold prices around the levels seen in London and New York. The P.B. of C. as the main counterparty is able to do that.

On the supply side we must factor into the long term picture the fall off in exploration and development in the gold mining industry. This will impact production over the long term. If the gold price goes higher, gold miners increase their reserves as the break-even point falls. This usually leads to a fall-off in production as lower grade ore moves through the mills.

LBMA price setting: $1,320.80after Tuesday 26th July’s $1,321.25.

The gold price in the euro was set at €1,201.60 up €0.46 from Monday’s €1,201.14.

Ahead of the opening in New Yorkthe gold price stood at $1,319.80 and in the euro at €1,200.80.

Silver Today –The silver price closed in New York at $19.64 on Tuesday up from $19.51 on Friday.Ahead of New York’s opening the price was trading at $19.60.

Price Drivers

Not only is the FOMC meeting under way but the markets are expecting an announcement from the Bank of Japan shortly, telling us that they will add more stimuli to their economy. We have no doubt that the BoJ is hoping this will weaken the Yen as well as make another attempt to contain structural deflation in the country. We expect both central banks announcements to be good for gold and silver.

However, we may have to wait until the Fed announcement before we see them react.

Gold ETFs – In New York on Wednesday there were sales of 4.453 tonnes of gold from the SPDR gold ETF (GLD), but no purchases or sales into or from the Gold Trust(IAU), leaving their holdings at 954.235 tonnes and 217.99 tonnes, respectively.

This sale, the second in two days at a similar level should have been enough to hurt the gold price as the first one did, but it didn’t. This is a positive sign, particularly because it is the SPDR gold ETF which is the main driver of the gold price at the moment.

Clearly, as we enter August the proximity of the ‘gold season’, the rising demand potential from India and the ongoing macro-economic problems, worldwide are causing the gold price to hold above $1,300. Add this week’s central bank statements and we expect more potential for a gold price rise than a fall. Once a rise begins, we expect gold ETF demand to resume.

Since January 4th this year, the holdings of these two gold ETFs have risen by 374.61 tonnes.

Silver –Silver prices could have a quiet time today, until gold leads the way again.

A shortened, updated and edited version of Julian Phillips’ commentary for Tuesday which was delayed from reaching us for technical reasons.

Shanghai prices have been higher than in New York, after gold was sold from the SPDR gold ETF [see below], and London followed Shanghai’s prices, so at this stage we conclude that New York prices were considered to have been marked down too far.

A weakening dollar is at the heart of any strength there is in gold and silver prices. Once again, in the face of analyst’s opinions, we see the dollar weakening across the board, this time alongside the FOMC meeting.

While the risk to the euro is to fall to $1.07 against the dollar, the U.S. does not want to see the dollar any stronger than at present despite the state of the E.U. We reiterate that we believe the dollar’s ‘bull’ run is over.

Russia and China are now continuing to buy gold for their reserves. China, Kazakhstan and Russia simply issue local currency to their miner’s and take some or all the local gold production into their reserves. It does not leave their countries and does not pass through any international gold market. The total amount involved could be around 25% of total global gold production.

Price Drivers

The FOMC meeting is scheduled to begin today with a statement issued on Thursday. There are few who expect a rate hike. We expect more reasons to be given as to why no rate hike is on the cards. The concept put forward by the Fed Chair Mrs. Yellen that we could see a rate hike in the ‘summer months’ is now off the table after Britain voted to leave the E.U., probably precipitating a recession in the U.K. and more than likely one in several member states of the E.U. if not the E.U. itself.

Physical demand in the U.S. remains the principal driver of the gold price, a fact that was aptly demonstrated Monday when over 4 tonnes of gold was sold from the SPDR gold ETF. This pulled the gold price to $1,314, but Shanghai took it back up with London agreeing China’s price. This is the first recent, noticeable, difference in the three global markets prices.

Gold ETFs – As noted, in New York on Monday there were sales of 4.466 tonnes of gold from the SPDR gold ETF (GLD), but purchases of 0.45 of a tonne into the Gold Trust (IAU), leaving their holdings at 958.688 tonnes and 217.99 tonnes, respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 379.063 tonnes.

Silver –Silver prices could have a quiet time this week, until gold leads the way again.

Gold Today –Gold closed in New York at $1,333.10 on Thursday after Wednesday’s close at $1,319.30.

The $: € was barely changed at $1.1028 down from $1.1029.

The dollar index fell to 97.01 from 97.00 Thursday.

The Yen was slightly stronger at 106.21 from Wednesday’s 107.02 against the dollar.

The Yuan was stronger at 6.6722 from 6.6742 Thursday.

The Pound Sterling was weaker at $1.3184 down from Wednesday’s$1.3254.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 22

2016 07 21

SHAU

SHAU

285.37

282.87

284.88

282.96

Dollar equivalent @ $1: 6.6722

$1: 6.6742

$1,330.30

$1,318.25

$1,328.01

$1,318.67

Shanghai prices were slightly less than at New York’s close, while London tried to pull prices lower at the opening.

The main bullion banks can arbitrage positions using the funds they have in all centers. Likewise the ICBC, the main Chinese bullion bank in China and a gold market maker in London can do the same, buying and selling gold without moving it across borders. This is acceptable to the Chinese monetary authorities as it involves a large use of Renminbi [Yuan] internationally.

Consequently, we are seeing the gold price smoothed out across the world. So a conclusion that can be drawn is that gold prices are in sync globally.

Nevertheless, this does not mean that there is a globally liquid gold market reflecting gold’s demand and supply. Traders and speculators continue to dominate prices, while physical gold continues to express a very different market sentiment as it moves into U.S. gold ETFs and across to Asia. At some point in the future the two different markets will come together in a most dramatic way.

The gold price in the euro was set at €1,198.98 down €1.10 from Thursday’s €1,200.08.

Ahead of the opening in New Yorkthe gold price stood at $1,325.05 and in the euro at €1,202.84.

Silver Today –The silver price closed in New York at $19.85 on Thursday up from $19.61 on Wednesday.Ahead of New York’s opening the price was trading at $19.68.

Price Drivers

Last night’s acceptance speech from Donald Trump was of significance to gold and silver prices should he become President.

Many believe he stands little chance of becoming President, just as the vast majority of Americans did not think he had a chance of becoming the Republican Presidential nominee when the selection process began. So the chances of him becoming President are more than a possibility. His message is pertinent.

He intends following a policy of what is clearly protectionism and a move away from globalization. This will not only be negative for growth, but disruptive and divisive for the global economy.

As it is, the global monetary system is marching determinedly to a multi-currency system. A President Trump will rapidly accelerate this process. The need for gold in ‘Official’ hands will grow in such an environment to smooth out the ruptures in cash flows between nations across the world.

Silver is likely to rapidly increase its pace towards a recognized monetary metal in that environment too.

A President Trump would be gold & silver price positive!

Gold ETFs – In New York on Thursday there were sales of 2.079 tonnes of gold from the SPDR gold ETF, leaving their holdings at 963.142 tonnes and purchases of 0.6 of a tonne into the Gold Trust, leaving their holdings at 217.54 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 383.091 tonnes.

Gold Today –Gold closed in New York at $1,319.30 on Wednesday after Tuesday’s close at $1,332.30.

The $: € rose to $1.1029 up from $1.1002.

The dollar index fell to 97.00 from 97.12 Wednesday.

The Yen was slightly weaker at 107.02 from Wednesday’s 106.48 against the dollar.

The Yuan was stronger at 6.6742 from 6.6785 Wednesday.

The Pound Sterling was stronger at $1.3254 down from Wednesday’s$1.3178.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 21

2016 07 20

SHAU

SHAU

282.87

/

282.96

/

Dollar equivalent @ $1: 6.6742

$1: 6.6770

$1,318.25

/

$1,318.67

/

Shanghai prices were in line with those of New York. Demand in China is rising with these lower prices. The media has labeled retail gold buyers as ‘Mammas’, pointing to the conservative older ladies who invest for long term financial security. These investors likely experienced the days of hyperinflation, or at least their own mothers related tales from those days.

We find it extraordinary that the media likes to give demeaning names to those who distrust the global financial system and favor gold itself. We have found such investors just as intelligent and perceptive as traders who go for short term profits. Fortunately few precious metal investors are affected by such puerile name calling.

The gold price in the euro was set at €1,200.08 down €4.00 from Wednesday’s €1,204.00.

Ahead of the opening in New Yorkthe gold price stood at $1,320.65 and in the euro at €1,198.63.

Silver Today –The silver price closed in New York at $19.61 on Wednesday down from $20.00 on Tuesday.Ahead of New York’s opening the price was trading at $19.42.

Price Drivers

With today’s European Central Bank meeting likely to have an effect on exchange rates and the gold price the prospect of more easing becomes important. But as with the Bank of Japan’s failure to move of late [saying ‘helicopter money’ is off the table], so the E.C.B. finds itself in a position where it is extremely limited in what it can do now or in the future. Lending is timid, so stimuli are not bearing fruit!

With the downward impact of Brexit on growth there are few relevant statistics that can be used to guide the E.C.B. Therefore we do not expect any action today [rates remain unchanged]. But we might see signals for more stimuli to be deployed when data is available for the next decision in September.

A major concern is how much further Mario Draghi of the E.C.B. can go [like the B. of J.] with a stimulus package that already includes a €1.7 trillion-euro ($1.9 trillion) asset-buying program increasingly constrained by ultra-low debt yields. A problem for policy makers is that although they’ve gone out of their way to spur credit expansion, the pick-up in lending remains timid. Under its own rules, the central bank can only buy debt with a yield at or above the deposit rate. Will they change rules in the future?

The E.U. is in uncharted territory. It is likely to castigate governmental inactivity on the growth front. This is gold & silver positive!

Gold ETFs – In New York on Wednesday there were no purchases into the SPDR gold ETF (GLD) or the Gold Trust (IAU), leaving their holdings at 965.221 tonnes and at 216.94 tonnes respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 384.57 tonnes.

Gold Today –Gold closed in New York at $1,332.30 on Tuesday after Monday’s close at $1,329.30.

The $: € rose to $1.1002 down from $1.1058.

The dollar index rose to 97.12 from 96.77 Tuesday.

The Yen was slightly weaker at 106.48 from Tuesday’s 106.11 against the dollar.

The Yuan was stronger at 6.6785 from 6.6920 Tuesday.

The Pound Sterling was weaker at $1.3178 down from Tuesday’s$1.3167.

Yuan Gold Fix

Shanghai prices were not available on site today.

The People’s Bank of China stepped into the Yuan market today and strengthened the currency as you can see above.

We continue to expect the Yuan to weaken down to 7.00 to the U.S. dollar by year’s end.

Bear in mind that with all the competitive devaluations across the world the dollar’s strength also meant the Yuan’s strength when it was around 6.2 to the dollar. China has not been devaluing against the dollar but is now trying not to be strong with it.

The fall in the Yuan is being engineered cautiously and without attracting too much attention. So far it has succeeded. Perhaps the PB of C is now trying to slow the fall so as to stay in the shadows.

The gold price in the euro was set at €1,204.00 down €0.74 from Tuesday’s €1,204.74.

Ahead of the opening in New Yorkthe gold price stood at $1,323.75 and in the euro at €1,202.21.

Silver Today –The silver price closed in New York at $20.00 on Tuesday down from $20.07 on Monday.Ahead of New York’s opening the price was trading at $19.74.

Price Drivers

With tomorrow’s European Central Bank meeting gold and silver prices are trying to mark time in a poor Technical environment.

Most expect the E.C.B. to do nothing, but the pressure is mounting heavily for more easing.

The euro remains relatively strong and the economic outlook for the E.U. remains tilted to the downside. The potential for a recession is there. So something must be done.

Yes, most are worrying that there is insufficient post-Brexit data to go on, but the need for more easing is very clear. So while most do not believe Draghi will do anything, we expect action!

Such action will precipitate a fall in the euro, the E.U. hopes, but as we have said many times before, the U.S. cannot afford to see a dollar rise through the 100 level on the dollar index.

Gold ETFs – In New York on Tuesday there were no purchases into the SPDR gold ETF, but there were purchases of 0.60 of a tonne into the Gold Trust, leaving their holdings at 965.221 tonnes and at 216.94 tonnes respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 384.57 tonnes.

Gold Today –Gold closed in New York at $1,333.80 on Thursday after Wednesday’s close at $1,332.20.In Asia the gold price held similar levels to New York.

The $: € fell to $1.1135 down from $1.1096.

The dollar index fell to 96.07 from 96.32 Thursday.

The Yen was weaker at 106.00 from Thursday’s 105.44 against the dollar.

The Yuan was slightly weaker at 6.6825 from 6.6855 Thursday.

The Pound Sterling was stronger at $1.3352 down from Thursday’s$1.3225 reacting to the mistake in expecting more easing now.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 15

2016 07 14

SHAU

SHAU

285.95

288.94

286.62

287.60

Dollar equivalent @ $1: 6.6825

$1: 6.6855

$1,330.94

$1,344.26

$1,334.06

$1,338.02

The Chinese gold market followed New York yesterday as the Yuan picked up slightly over yesterday’s exchange rate. All global markets were surprised by the Bank of England’s inaction, despite the indication that if the U.K. economy slowed down between now and August, easing action would be taken. This left the markets in the same position as the Bank of England, waiting for post-Brexit data.

The attempt to break the gold price down further in New York, with yesterday’s over 2 tonnes sale of gold, continued, but with less enthusiasm. The Technical picture continues to point downwards but appears to lack conviction.

As we forecast yesterday, “It is clear that if the BoE does announce easing we may well see a very strong upward move in the gold price. If not we expect to see the gold price either move slightly higher or sideways, as this has been discounted in the gold price now.”

LBMA price setting: $1,330.50 up from Thursday 14th July’s $1,325.70.

The gold price in the euro was set at €1,196.12 up €3.41 from Thursday’s €1,192.71.

Ahead of the opening in New Yorkthe gold price stood at $1,334.2 and in the euro at €1,199.33.

Silver Today –The silver price closed in New York at $20.25 on Thursday down from $20.38 Wednesday.Ahead of New York’s opening the price was trading at $20.26.

Price Drivers

Global financial markets were stunned by the lack of action by the Bank of England yesterday, despite an intention to add more easing should the U.K. turn down in the period until the next meeting.

With hindsight we can see why they did this. We don’t think it was because they had done enough to date, but we do see that like global markets, post Brexit data on the way forward and impact of Brexit needs to be assimilated, before decisions are made. Pre-Brexit information cannot point the way forward!

That throws us back to the ‘big’ picture, once again. There we see a stabilizing China with growth picking up to 6.7% indicating it is becoming less dependent on the developed world and now walking its own road. We do expect, long-term, that China’s economic activity will separate itself from that of the developed world, while continuing to draw wealth and power from it. The developed world continues to have a falling growth prospect and a rising debt burden threatening to hurt it badly. [It is different in China where economic growth enables loans to be repaid. This warrants higher debt levels]. The overall economic picture promises increasingly heavy exchange rate pressures that favor gold and silver.

Gold ETFs – In New York on Thursday there were sales of 2.376 tonnes of gold from the SPDR gold ETF but we did see purchases into the Gold Trust of 0.36 of a tonne, leaving their holdings at 962.845 tonnes and at 214.90 tonnes respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 380.154 tonnes.

Silver –Silver prices are chomping at the bit towards the upside. The reins and the bit are being held back by the gold price only.

The dollar is slightly stronger today against the Yen and weaker against a recovering pound. But the moves are not significant, nor are expected to be so, as the world waits for Mark Carney of the Bank of England tomorrow. Some believe he will do nothing so as to encourage the pound to recover, feeling his focus will be on the internal situation in Britain and delay any further easing until August.

But with a recession on the cards for the U.K., and his failure to try to protect the pound’s exchange rate since Brexit, so far, we feel that it is unlikely that he will do nothing. He has before him a real chance of lowering the pound’s exchange rate even further, which in itself will act as an economic stimulus to the U.K. economy. Hence, we see a further easing now.

As to the news on China’s claim to sovereignty over the Spratly Islands chain, we see this, for now, as gold and silver neutral. Likewise, the new British Prime Minister’s appointment, it will speed up negotiations on Brexit, but again this is gold and silver neutral.

The prime drivers of the gold price remain macro-economic and monetary factors which will not change overnight. Daily news factors are unlikely to change the upward trend in the gold price.

Gold ETFs – In New York on Monday there were huge sales of 16.035 tonnes of gold from the SPDR gold ETF but purchases of 0.45 of a tonne into the Gold Trust. Their holdings remain at 965.221 tonnes and at 214.54 tonnes in the SPDR gold ETF and Gold Trust respectively.

The sale of 16.035 tonnes was a massive number and precipitated the fall in the New York COMEX gold market. The timing and size of the sale is an extraordinary statement that was more than just a future view of the gold market on Friday, after the BoE actions. It appears to us to be an attempt to force the gold market lower at a time when gold dealing was sparse in New York. Instead of shoving the market lower, Shanghai turned the price around and took it higher.

There may be another attempt to push prices down today in New York, but we expect London and Shanghai to take the same neutral stance in the gold market.

Since January 4th this year, the holdings of these two gold ETFs have risen by 382.17 tonnes.

Gold Today –Gold closed in New York at $1,332.20 on Tuesday after Monday’s close at $1,354.60.In Asia the gold price also fell further as you can see below

The $: € fell to $1.1051 up from $1.1100.

The dollar index rose to 96.53 from 96.12 Tuesday.

The Yen was weaker at 104.32 from Tuesday’s 103.44 against the dollar.

The Yuan was slightly weaker at 6.6859 from 6.6859 Tuesday.

The Pound Sterling was stronger at $1.3271 up from Tuesday’s$1.3158 but waiting for Governor Carney tomorrow when we expect the BoE to add further easing of interest rates!

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 13

2016 07 12

SHAU

SHAU

286.90

292.05

288.16

291.86

Dollar equivalent @ $1: 6.6845

$1: 6.6859

$1,334.97

$1,358.65

$1,340.83

$1,357.76

The Chinese gold market followed New York down, but then turned it up at China’s morning Fix taking it higher during their day to set the pace for London’s morning.

The attempt to break the gold price down in New York with the very large physical gold sale worked to some extent, but Shanghai then ignored the sale as demand came in at the lower prices. Certainly, Shanghai took the reins in the last day against the will of New York. We will watch today to see who exerts dominant pricing power?

Gold Today –Gold closed in London at $1,344.90 on Monday after Friday’s New York close at $1,343.70.In Asia the gold price stayed in line with London’s gold price, also adjusting for a weaker Yuan.

The $: € slipped to $1.1156 down from $1.1124.

The dollar index moved lower to 95.54 from 95.73 yesterday.

The Yen was stronger again at 101.70.

The Yuan was almost unchanged at 6.6661 from 6.6663 on Monday.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 07 5

2016 07 4

SHAU

SHAU

288.21

290.07

288.48

290.01

Dollar equivalent @ $1: 6.6673

$1: 6.6600

$1,344.52

$1,354.68

$1,345.78

$1,354.40

Shanghai pulled the gold price back ahead of New York’s re-entry after Independence Day to a level not far from the close of last Thursday.

We do expect a ‘shunt’ effect in New York as the three global gold markets return to a common view on the gold price. We expect the view that caused New York to take gold and silver prices higher on Friday, ahead of the long weekend; will return to move prices up today.

The Yuan continues to weaken, as the Yen strengthens.

Japan would be in deep trouble if it were not for the fact that its creditors are mainly its own citizens. Japan is in deflation’s vice like grip even after massive Q.E.

Once again, against all expectations, the dollar is holding close to the same levels as it has done for the last week. In view of the warnings on Brexit it is remarkably steady.

LBMA price setting: $1,344.75 up from Monday 4th July’s $1,348.75.

The gold price in the euro was set at €1,206.49 down €5.11 from Monday’s €1,211.60.

With New Yorkreturning for business today, the gold price ahead of its opening stood at $1,347.65 and in the euro at €1,209.14.

Silver Today –The silver price closed in London on Monday at $19.85. With New York returning today they will find the silver price hardly changed at $19.79.

Price Drivers

New York returns to see silver higher so expect a ‘shunt’ effect from the market. We usually see U.S. investors buy on the rise. With the return and seeing silver prices higher, we expect them to join the fray.

Gold may well pause and consolidate for a short time, before a strong move higher, as investors contemplate the Technical picture [which is looking good!

India

When the ‘gold Season’ starts again in India in September, we now expect strong demand from the sub continent because the monsoon is now covering almost all of India, a prerequisite for high Indian gold demand.

Gold ETFs – With the U.S. closed yesterday the holdings of the SPDR gold ETF were unchanged with its holdings at 953.914 tonnes and the holdings of the Gold Trust at 208.17 tonnes. We don’t expect these to rise again today as the gold price has corrected a little and points higher.

Since January 4th this year, the holdings of these two gold ETFs have risen 365.298 tonnes. Until the ‘gold season’ starts in September, ETF demand is the main driver of the gold price.

Silver –Silver prices may well run ahead of gold as U.S. investors, who closed positions last Friday, re-open them on the long side. With the U.S. the prime driver of the silver price we expect them to jump in on the upward train.

We bear in mind that silver is a much smaller market, with a tonne of silver costing $643,000 against a tonne of gold at $43.404 million. Consequently, it is much more volatile.

The Tsunamis haven’t struck, but are on the way. The damage has been done! Gold and silver pause ahead of strong moves!

Gold Today –Gold closed in New York at $1,326.50 up from $1,318.90 on Monday a rise of $7.60.In Asia the gold price began to pull back and continued in London, dropping to $1,308 before reversing higher.

The $: € recovered to $1.1092 from $1.1004 before starting to weaken again before New York opened.

The dollar index moved lower to 95.97 from 96.37.

The Yen recovered slightly [102.31 down from 101.70].

The Yuan was stabilizing to 6.645 from 6.65 yesterday.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 06 28

2016 06 27

SHAU

SHAU

282.65

283.36

282.15

283.43

Dollar equivalent @ $1: 6.6446

$1: 6.6412

$1,323.11

$1,325.41

$1,320.75

$1,327.42

The Yuan ‘fixing’ continues to lower the Yuan against all currencies, as you can see above. The Yuan is headed lower and will continue to do so, retreating from levels it was taken to by a rising dollar. After the current pause as the full weight of the ‘Brexit” earthquake is fully assessed by global markets we expect aftershocks to strike in the financial world.

It is important for gold investors to realize that gold is simply reflecting the real weakness of all currencies, from now on. As a result of the tectonic shifts in the monetary world that have been triggered by the U.K. leaving the E.U., we have seen the first change, of many to come, in the global economy.

LBMA price setting: $1,312.00 down from Monday 27th June’s $1,324.60.

The gold price in the euro was set at €1,200.92 down €0.040 from Monday’s €1,200.96.

Ahead of New York’s opening, the gold price was trading at $1,310.70 and in the euro at €1,183.05.

Silver Today –The silver price closed in New York on Monday at $17.75 up from Friday’s $17.72 a rise of 3 cents. Ahead of New York’s opening the silver price stood at $17.63.

Price Drivers

We live in a time of consequences that will bring gold into an active role in the global monetary system!

The economic growth in China has been at the expense of the developed world. In 2000 80% of global cash flow went to the developed world. By 2020 only 34 % will go to the emerging world. At the moment the developed world gets around 55% of the global cash flow. This is the foundation of the economic decay of the developed world.

The credit crisis in 2008 was a separate event of euphoric attitudes towards credit. Whether in auto finance or at government level the same view of credit persists and encouraged.

The developed world is experiencing severe deflationary pressures, which are ameliorated to the point where they are barely visible due to various forms of quantitative easing. The result appears to be nearly zero inflation. We are waiting to see inflation burst upon us. There is a point where deflation and inflation stop compensating each other and combine to trigger rocketing inflation. The classic case of this was in Germany in 1923 in the Weimar Republic. The root cause first showed itself in 2008 from which the world has not yet emerged.

Political institutions have either been emasculated due to ‘hung’ governments or lack of will to really promote growth. Crises initiate the process of loss of control by governments triggering further socio/political crises. Brexit appears to be a start in a long series of events which will breed further crises. [More in our newsletters – subscribe below]

We look to Europe for the next crisis. It is likely to spawn protectionism and potential capital controls as the world moves into reverse gear in the process of globalization.

Gold ETFs – On Monday the holdings of the SPDR gold ETF (GLD) again jumped 13.068 tonnes to a holding of 947.381 tonnes and the holdings of the Gold Trust (IAU) rose 0.45 of a tonne to take the holdings to 202.36 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 352.955 tonnes.

Silver –Silver prices are still ready to go full pelt, after this short-term consolidation.

Gold Today –Gold closed in New York at $1,266.20 up $0.30 on Wednesday ahead of the start of voting in Britain.Asia took it up to $1,270 and London let it slip a dollar and a half, despite strong demand for physical gold in the U.S.

The $: € moved lower to $1.1336 from Wednesday’s $1.1271. The dollar index moved to 93.48 down from 93.89. It is a day when the dollar is weaker in the world’s main currencies, but the Yuan was weaker too.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 06 23

2016 06 22

SHAU

SHAU

267.96

269.81

268.66

268.00

Dollar equivalent @ $1: 6.5797

$1: 6.5886

$1,266.70

$1,273.72

$1,270.01

$1,265.17

While the Yuan weakened against the dollar, the gold price in Shanghai was slightly stronger than New York, which led the way for London to follow. This showed clearly the small change in direction was due to the influence of Shanghai showing a measure of pricing power.

Gold prices worldwide are ‘on hold’ pending tomorrow’s result in Britain, after which we will see strong movements.

We believe that a ‘stay in’ vote has been discounted in global financial markets, to some extent.

At the moment, the positive Technical picture remains unchanged. We don’t expect any change, subject to tomorrow’s vote.

The gold price in the euro was set at €1,110.21 down from Wednesday’s €1,119.96.

Ahead of New York’s opening, the gold price was trading at $1,261.25 and in the euro at €1,110.60.

Silver Today –The silver price closed in New York on Wednesday at $17.27 from Tuesday’s $17.23 a rise of 4 cents. Ahead of New York’s opening the silver price stood at $17.31.

Price Drivers

We have to be careful to not see the referendum in the U.K. as the ‘be all and end all’ in the global economy today. There are many other issues going on in other parts of the world.

The dollar is a weaker today, a factor totally unrelated to the British referendum. The news out of the E.U. from France is that manufacturing continues to fall into a contractionary state.

Repeat: The Pound Sterling continues at very strong levels! If the vote is to leave, expect a heavily plunging pound!

Currencies and precious metals are in gambler’s territory as the polls look pretty even!

Gold ETFs – The holdings of the SPDR Gold ETF (GLD) rose another 3.564 tonnes as the physical buying continued at a fast pace, leaving its holdings at 915.898 tonnes. The Gold Trust (IAU) saw no action yesterday and its holdings remain at 201.91 tonnes.

Since January 4th this year, the holdings of these two gold ETFs alone have risen 321.022 tonnes. Silver –Silver prices are stronger over yesterday’s price at $17.41 but remain and now wait for the vote to be announced tomorrow morning.

Gold Today –Gold closed in New York at $1,265.90 down $24.20 on Tuesday as a “Bremain” position is taken in global financial markets.Asia took it down to $1,265 too and London held it around that level, despite strong demand for physical gold in the U.S.

The $: € moved lower to $1.1271 from Tuesday’s $1.1341. The dollar index moved to 93.89 up from 93.46.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 06 22

2016 06 21

SHAU

SHAU

269.81

272.84

268.00

271.86

Dollar equivalent @ $1: 6.5886

$1: 6.5818

$1,273.72

$1,289.38

$1,265.17

$1,284.72

New York, Shanghai and London have decided that $1,265 is the dealer’s consensus on the gold price and will wait for the vote tomorrow before they move one way or the other. We are getting the impression that Shanghai [under the control of the People’s Bank of China] does not want the price there to move out of line with either New York or London. There may well be a day when they change their minds, but we can’t expect that before September when the Yuan is an active part of the Special Drawing Right of the I.M.F.

The expected volatility this week will only reappear after the announcement of the British Referendum result.

At the moment, the positive Technical picture has not changed despite yesterday’s fall. We don’t expect any change, subject to tomorrow’s vote.

The gold price in the euro was set at €1,119.96 down from Friday’s €1,129.45.

Ahead of New York’s opening, the gold price was trading at $1,265.40 and in the euro at €1,120.72.

Silver Today –The silver price closed in New York on Tuesday at $17.23 down from Monday’s $17.50 a fall of 27 cents. Ahead of New York’s opening the silver price stood at $17.24.

Price Drivers

The dollar is a little stronger today, tempered by Mrs. Yellen’s remarks yesterday in front of Congress. She clarified that the British referendum is a significant event that may well affect the U.S. economy. World financial markets are moving as if the referendum is a significant event. It took just one person’s death in 1914 to start World War 1. Will this event trigger events in the financial world as great, or greater, than 2008’ “Credit Crunch”. It would seem so!

The financial world wants a ‘Bremain’ result not a ‘Brexit’ and is discounting it to some extent. This means that a ‘Brexit’ result will cause tremendous turmoil in global markets while a ‘Bremain’ result may provoke a wobble but not turmoil. The polls show the vote still, as ‘too close to call’.

As we said yesterday, “Friday therefore promises to not only be a volatile day, but an historic one.”

The Pound Sterling continues to sit at very strong levels! If the vote is to leave, expect a heavily plunging pound!

Currencies and precious metals are in gambler’s territory as the polls look pretty even!

Gold ETFs – On Friday the holdings of the SPDR & gold Trust rose another 3.546 tonnes as the physical buying picked up its pace, into the gold ETF, leaving its holdings at 912.334. Another 0.45 of a tonne of gold bullion were added to the Gold Trust, leaving their holding at 201.91 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 317.458 tonnes.

Silver –Silver prices are steady and holding ahead of the vote tomorrow but remain within reach of $17.30 and now wait for the vote to be announced at 7.00a.m. tomorrow morning.

Gold Today –Gold closed in New York at $1,298.40 up $16.70 on Friday breaking up to resistance before pulling back, falling to $1,282 support at London’s opening this morning.

The $: € moved slightly lower to $1.1279 from Friday’s $1.1254 over the weekend. The dollar index moved to 93.71 down from 94.38.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 06 20

2016 06 17

SHAU

SHAU

272.42

271.52

272.19

272.38

Dollar equivalent @ $1: 6.5810

$1: 6.5995

$1,287.53

$1,279.68

$1,286.44

$1,283.74

Shanghai reacted to the mood of London late on Friday, this morning, as the news about the U.K. and the murdered British M.P. began to be reflected in the polls and a “Brexit” seems unlikely today.

We expect volatility this week and swings back and forth as different polls tell different tales. $1,280 continues to hold. The Technical picture continues to point higher despite the daily picture pointing to a narrowing trading range.

Physical gold buying continued strongly in the U.S. on Friday [see below].

Global financial markets are far more than just about potential ‘Brexit’. A great danger for investors and traders is to be caught up in short-term emotional swings. At the time they seem overwhelming, but inevitably the main issues underlying prices return to adjust markets. We expect the same to be true not just in this week, but next week too. The Technical picture will have a stronger influence than usual particularly in the next fortnight.

LBMA price setting: $1,283.25 down from Friday 17th June’s $1,284.50.

The gold price in the euro was set at €1,132.51 down from Friday’s €1,141.12.

Ahead of New York’s opening, the gold price was trading at $1,280.30 and in the euro at €1,129.61.

Silver Today –The silver price closed in New York on Thursday at $17.46, up from Thursday’s $17.17 a rise of 29 cents. Ahead of New York’s opening the silver price stood at $17.35.

Price Drivers

The murder of the British MP, Jo Cox, last week caused a short term, dealer markdown of prices in the gold and silver markets today, at the opening in London. The gold price remains on support and should begin to rise across the world as the respectful sentiment currently ruling, gives way to the underlying global crises and the referendum. The world being what it is, the Brexit ‘in’ and ‘out’ campaigns will resume and the tragedy fall into the background ahead of the vote. It could still go either way. It will remain the cause of this week’s volatility in all global financial markets.

We detail the consequences on prices more, in our newsletters [website for subscription below].

Gold ETFs – On Friday the holdings of the SPDR & gold Trust rose another 5.347 tonnes as the physical buying ratcheted higher into the gold ETF, leaving its holdings at 907.879. Another 2.01 tonnes of gold bullion were added to the Gold Trust, leaving their holding at 200.41 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 311.521 tonnes.

Silver –Silver prices remain robust as they fell less than 1% today. This indicates a robust underlying strength that may well ride through the swings in the gold market this week. Surprisingly, we expect silver prices to be far less volatile than gold prices this week.

Gold Today –Gold closed in New York at $1,294.30 up $9 on Wednesday rose strongly in Shanghai to $1,306 before rising again at London’s opening.

The $: € moved lower to $1.1260 from yesterday’s $1.1228 overnight. The dollar index moved to 94.48 down from 94.78.

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM

Benchmark Price PM

2016 06 16

2016 06 15

SHAU

SHAU

275.16

272.75

277.07

273.14

Dollar equivalent @ $1: 6.5982

$1: 6.5967

$1,297.09

$1,286.02

$1,306.09

$1,287.86

Shanghai led the way again, after New York closed, taking the price higher to be followed by London taking it higher still, where the gold price barged through overhead resistance and the psychological resistance at $1,300 and hit $1,310. We see this, in part, as HSBC buying in London to supply yesteradya’s SPDR gold ETF demand as well as Chinese investors rushing into gold.

For supplies to be this tight in London tells us that the improvement in the technical picture was reinforced by the supply/demand position in London as U.S. demand continues to burgeon.

We note from Shanghai’s performance, that demand in London or New York cannot be met in China, as no gold exports are allowed from there. Hence Shanghai is untouched by any supply squeeze in the developed world.

Only the Chinese bank ICBC could relieve such demand from its London stocks. But its task, while it is to provide gold to the market as a ‘market maker’ it is not bound to keep the London market ‘in balance’ from its stocks. But it is tasked by China to supply gold to China too. Consequently, it is entirely proper to provide balance in the Chinese gold market, not London. This means that the ICBC will send the gold not needed to be a market maker in London, to China to meet that demand.

Global financial markets are appearing to be discounting an exit of the U.K. from the E.U. and the consequential turmoil now expected. Next week may well prove a ‘watershed’ week for the financial world. If the U.K. votes to stay in the E.U. it will be a damp squid, but if not it may well prove to be ‘the event’ that triggers disruptions that will benefit gold and silver tremendously.

The gold price in the euro was set at €1,164.37 up from Wednesday’s €1,141.79.

Ahead of New York’s opening, the gold price was trading at $1,305.50 and in the euro at €1,168.44.

Silver Today –The silver price closed in New York on Tuesday at $17.54, up from Tuesday’s $17.38 a rise of 16 cents. Ahead of New York’s opening the silver price stood at $17.71.

Price Drivers

Not only did the Fed hold rates at current levels, it did warn of game changing events such as Brexit, that could affect U.S. growth and the dollar. It stated that while jobs growth was slowing, economic growth was rising. After Janet Yellen’s statement the gold price jumped to over $1,294 in line with more buying into the SPDR gold ETF.

The next event, overnight, to affect markets was the Bank of Japan’s Kuroda confirmation that it would do nothing more to stimulate Japan’s economy. At this point the global markets reacted by falling. It was not just in Japan, it was across the world, why?

We see this as a signal that Japanese monetary stimulation is not succeeding, confirmed by a stronger Yen, now trading at 104.26 to the U.S. dollar. Falling equity markets around the world tell another story. While they are the remaining source of decent yields and likely to stay that way, prospects for global growth are slowing and now affecting global equities, which are either ‘toppy’ or beginning to fall. In other words, the dark clouds that we have been seeing on the horizon are moving above us. What next? Brexit is next, next Thursday with results seen later that day.

Gold ETFs – On Wednesday the holdings of the SPDR gold ETF(GLD) & Gold Trust(IAU) rose another 2.14 tonnes as more bullion was purchased into the gold ETF, leaving its holdings at 900.75. 0.75 of a tonne of gold bullion was added to the Gold Trust, leaving its holding at 197.65 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 301.632 tonnes. This could prove more that the central banks disclose they bought over 2016. With the distinct possibility of Brexit ahead we could see this total leap over the rest of the year.

Silver –Silver is going at full pelt now and should continue to do so in the weeks ahead.

Edited and updated version of Julian Phillips’ latest commentary following the dovish Fed comments implying perhaps only one rate increase this year, if that.

With the Fed completing its two-day meeting today markets held their breath to see if any surprises would be sprung on us. We didn’t expect any. But we may hear Mrs. Yellen be less optimistic than the market expects and hopes. The persistent desire for higher interest rates, which the Fed indicated was on the way in summer, may well miss summer and autumn. We see winter as an appropriate time because of the cold damage winters can cause. The U.S. economic recovery may well be looking OK but the data threatens to weaken. In itself this prospect has so far put the Fed off raising rates. In the event gold surged to the high $1,290s

The global economy continues to weaken and will affect the U.S. Most importantly, a rate hike would cause the dollar to rise, something that will damage the U.S. economy. In the event gold surged up to the highish $1.290s making another tilt at $1,300, before being brought back down a few dollars in later trade. It will be interesting to see what the Asian and European markets make of the latest Fed inaction overnight and tomorrow.

Global financial markets are tensioning up in preparation for next week’s Brexit vote, with the Yen hitting new recent highs at 106.21: $1, as global equities continue to rise slightly to ‘toppy’ areas.

As we have said in the past, equities are rising because they are the only place left where there is yield, not because a rosy future lies ahead. The huge danger in this is that if and when interest rates do rise, both bonds and equities will tumble!

Yesterday, we mentioned ‘a potentially devastating set of ‘ripple’ effects’’. We need to emphasize this. We are not simply talking about the ripples setting off other crises elsewhere, we are taking about a group of crises being set off and when synergized together, create an even larger global crisis in which precious metals will blossom.

Gold ETFs – On Tuesday the holdings of the SPDR & gold Trust rose yet again as 2.376 tonnes was purchased into the gold ETF, leaving its holdings at 898.671. No purchases or sales were made in the Gold Trust, leaving its holding at 196.90 tonnes. This persistent buying is not simply holding prices up, but steadily draining London’s physical gold liquidity. We are under no illusion that once the ‘season’ for gold begins in September. Market physical shortages will shine through.

Silver –Silver is again marking time without making as strong a move as gold.